What is the Clearing and Settlement Process in NSE?

“Clearing and settlement” is the process through which obligations from a stock market trade are determined, and the securities and funds are transferred between the buyer and seller. 

In the NSE clearing and settlement process, clearing determines the amount of securities and funds each participant must deliver or receive. Settlement completes the transaction by transferring the securities to the buyer and funds to the seller according to the applicable settlement cycle.

What is T+2 Settlement in India?

Under a T+2 settlement cycle, a trade executed on day “T” is settled two business days after the trade date. For example, 

• Suppose a trade takes place on Monday.
• Now, settlement generally occurs on Wednesday, subject to holidays and applicable exchange and clearing rules.

Note: As of January 2023, India has moved to T+1 settlement for regular equity trades. (Source: Economic Times)

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